He attended the United States Military Academy from 1834 to 1835, but resigned prior to graduating. Liddell then moved to Catahoula Parish and established his own prosperous plantation, "Llanada," near Harrisonburg, Louisiana. His famous feud with Charles Jones, which eventually led to his death, began in the 1850s.

Liddell commanded a division at Chickamauga in 1863, but repeatedly refused promotion to Major General in order to secure an assignment closer to his plantation, which was in jeopardy from Jayhawkers. Liddell was approached by General Braxton Bragg, a West Point classmate, to become his Chief-of-Staff and replace General W.W. Mackall, but Liddell refused. Although he was publicly critical of Bragg, Liddell seemed to enjoy his favor, which may have earned him the enmity of several of the officers in the Army of Tennessee. He remained very close with his classmate Hardee. Despite his personal clashes with fellow officers, Liddell had provided invaluable service to the Army of Tennessee. His brigade was pivotal at Perryville and Stones' River (where his sixteen-year-old son Willie Liddell was mortally wounded), and suffered the highest percentage of casualties at Chickamauga.

General Bragg refused to spare Liddell, but when Bragg was relieved by Jefferson Davis after the Chattanooga disaster, Liddell appealed personally to the President for a transfer and command of District of Northeastern Louisiana, which he received and held during the Red River Campaign in 1864. He was later assigned to overall command of the infantry at Mobile, Alabama until to its surrender in 1865. During the last campaign, Liddell and UnionMaj. Gen.E.R.S. Canby engaged in the Battle of Fort Blakely,[1] one of the last engagements of the war, where he was captured. Canby would later prove influential in Liddell's life by securing amnesty for him from the Federal Government.

During his Trans-Mississippi service, Liddell found himself in conflict with his immediate superior, Richard Taylor, the brother-in-law of President Davis, and regretted leaving the Army of Tennessee. In contrast to many modern historians, Liddell lays the blame for the Confederate failure to recapture the Mississippi or unite some 60,000 troops of their far Western Commands under Generals Magruder, Taylor, and Price with the Army of Tennessee on Taylor himself, rather than Edmund Kirby Smith. Unknown to Liddell, by late 1864 Generals Bragg, Hardee, and E.K. Smith made several petitions for Liddell's promotion to positions including James Mouton's Texas Division, and Hardee's Chief of Staff, but these were not acted on before the war drew to a close.

Liddell held a reputation for being outspoken, and was well connected. In December 1864, he wrote a letter to Edward Sparrow, a Confederate Senator from Louisiana and chairman of the military Committee, expressing his conviction that the war was going against the Confederacy. He expressed the need for full emancipation of the slaves in order to secure foreign assistance. Although he admitted it may have been too late to act, he felt that emancipation may have also been a solution to the South's growing manpower crisis. Senator Sparrow showed the letter to General Robert E. Lee, who agreed with Liddell on all points, stating that "he could make soldiers out of any human being that had arms and legs."

In 1866, Liddell wrote his memoirs, in which he was highly critical of the Confederate leadership and his fellow officers, including Davis and Bragg. The memoirs themselves are actually a collection of several separate manuscripts, letters, and battlefield records, which he was unable to combine before he was murdered.

He mentions at several times the growing sense of futility he and other officers felt in the unlucky Army of Tennessee. It was plainly clear to them after the fall of Forts Henry and Donelson that their cause was doomed unless they could concentrate their forces and wage an offensive campaign, however political intrigue always seemed to squander any gains made by the army. Liddell comes off as a fair, impartial officer, even proposing that had the south recruited generals like George H. Thomas, whom he considered the best Union Commander, things may have turned out differently.

A gentleman and one of the few selfless officers of the period, Liddell refused promotion, and endeavored to help any officer he was assigned to, regardless of whether they were liked or not. He was opinionated and outspoken, yet his opinion was valued, and he held the ear of the echelons of Confederate command, including Davis, A.S. Johnston, Bragg, and Hardee. Perhaps his military education, but lack of formal military background, led to this unique quality. He spent his vast personal fortune on equipping his own brigade, even though it was from a different state. The brigade itself was the only unit in the Army of Tennessee never to court-martial an enlisted soldier, and was known as the hardest-fighting and best-drilled brigade in the Army of the Tennessee.

Liddell was murdered in 1870 by Col. Charles Jones, the culmination of a twenty-year real estate dispute that had seen Jones and his band of thugs murder several friends and family members of Liddell. He was buried on his sprawling plantation in Louisiana.

United States War Department. The War of the Rebellion: a Compilation of the Official Records of the Union and Confederate Armies. Washington, DC: U.S. Government Printing Office, 1880–1901. OCLC427057. ISBN978-0-918678-07-2.